Futures prices for gold, silver and platinum posted solid gains Wednesday on expectations that members of the Organization of Petroleum Exporting Countries would agree on a plan to reduce exports of crude oil, analysts said.
On other markets, energy futures retreated; livestock and meat futures rose sharply; grains and soybeans were mixed, and stock index futures fell.
Analysts said the metals markets were primed for a technical rally. And reports that seven independent oil-producing countries had offered to cut their oil exports if OPEC would do the same provided an impetus for the surge.
The oil-rich countries hope a drop in exports will reduce world supplies enough to force oil prices higher. Because higher oil prices would be viewed as inflationary, investment demand for precious metals also could increase.
The non-OPEC nations made their offer of a 5% cut in exports contingent on the 13 members of OPEC agreeing to a reduce their exports by the same amount.
OPEC ministers were to meet today in Vienna to discuss the offer. Reports of disagreement among OPEC members, especially between Saudi Arabia and Iran, caused oil futures to drop sharply late in the day, but the metals "ignored that completely," said Bette Raptopoulos, metals analyst for Prudential-Bache Securities in New York.
"The metals are anticipating that the OPEC talks will continue in a positive vein tomorrow," she said.
Technical data suggested the metals rally would continue, said Richard Levine, vice president of the precious metals and foreign exchange group at Elders Futures Inc. in New York.
Silver futures made an especially sharp move upward because, Levine said, the recent lack of volatility in the silver market had made it overdue for a strong move in either direction.
On the Commodity Exchange in New York, gold settled $2.50 to $3 higher, with the contract for delivery in June at $454.30 an ounce; silver was 11.5 cents to 11.9 cents higher, with May at $6.50 an ounce. Platinum gained $6.50 across the board on the New York Mercantile Exchange, with July settling at $526.20 an ounce.
Skepticism about an oil export cut sparked a heavy round of late selling in the energy futures pits at the New York Mercantile Exchange.
"I think a lot of people are anticipating there's a chance that OPEC will not agree to cut back on production," said Andrew Lebow, energy analyst with E. D.& F. Man International Futures Inc.
Pork Bellies Advance
West Texas Intermediate crude oil settled 26 cents to 33 cents lower, with June at $18.27 a barrel; heating oil was 0.27 cent to 0.49 cent lower, with May at 51.77 cents a gallon, and unleaded gasoline was 0.06 cent to 1 cent lower, with May at 52.36 cents a gallon.
Higher cash prices linked to stronger demand supported livestock futures on the Chicago Mercantile Exchange, said Philip Stanley, an analyst with Thomson McKinnon Securities Inc.
Stock index futures retreated on the Chicago Mercantile Exchange. The contract for June delivery of the Standard & Poor's 500 index settled 0.80 point lower at 264.
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OPEC Story, Page 1